An automobile owned by the plaintiff G, in which the plaintiff K was a passenger, collided in Ohio with an automobile which was owned by P Co., was leased to D Co. and was operated by J. A negligence action brought by the plaintiffs in Ohio was dismissed as to P Co. and D Co. owing to J's lack of authority to act for them when the collision occurred. The plaintiffs, who were insured parties under the uninsured motorist provisions of a policy issued by the defendant on G's automobile, applied for a statutory order ( 52-410) to direct the defendant to proceed with arbitration of the plaintiffs' claim for damages. In special defenses, the defendant alleged that the plaintiffs had not demonstrated that J was operating an uninsured automobile as defined in the policy, that the plaintiffs sued P Co. and D Co. without the required written consent of the defendant, that a copy of the plaintiffs' process in Ohio was not, as required, forwarded immediately to the defendant, and that the plaintiffs' claim was barred by the Statute of Limitations. The court concluded that these issues were not subject to arbitration and that the plaintiffs must first establish policy coverage in an independent action. Held: 1. Since, under the arbitration clause of the policy, the phrase "matter or matters" of disagreement to be arbitrated refers only to the issues of (1) the liability of the owner or operator of an uninsured automobile to the claimant and (2) the amount of damages flowing from that liability, the court correctly concluded that the issues raised by the special defenses were not matters to be determined by arbitration but must be determined as conditions precedent to the applicability of the arbitration provisions of the policy. 2. The conclusion of the trial court that an independent action was necessary to establish coverage was erroneous since, on the allegations in the present case, the questions relating to coverage could be adjudicated in the proceeding under 52-410 at the same time as the question of arbitrability, and the court should have decided the issues as to coverage and then whether to order or deny arbitration, according to the rights of the parties.
Argued November 9, 1967
Decided December 7, 1967
Application for an order to proceed with arbitration, brought to the Superior Court in New Haven County and tried to the court, Wall, J.; judgment denying the application and thereafter a motion to open the judgment was denied; from the denial of the motion and from the judgment the plaintiffs appealed. Error; further proceedings.
Burton M. Weinstein, with whom was Ralph L. Palmesi, for the appellants (plaintiffs).
Vincent F. Dooley, for the appellee (defendant).
The plaintiffs brought an application to the Superior Court, under General Statutes 52-410, for an order directing the defendant to proceed with arbitration in compliance with the uninsured motorist provisions of an automobile insurance policy issued by the defendant to Gloria Snively, now known as Gloria Snively Visselli, covering the operation of a Ford automobile. The plaintiff Kay William Snively, her former spouse, is a beneficiary of the insurance policy by virtue of a family protection coverage endorsement. The plaintiffs, as owner and passenger in the automobile, are beneficiaries of the insurance policy issued by the defendant. The proceeding before us arises from an accident which occurred in Ohio on June 20, 1957, and involved the insured automobile and another motor vehicle, owned by Patterson Pontiac, Inc., which was leased to Drake Investment Corporation and which was operated at the time by Joseph Kimbrough. The plaintiffs brought a negligence action against Patterson and Drake in Ohio in 1959, and thereafter in 1960 the Ohio court dismissed the proceedings as to Patterson and Drake because Kimbrough was not acting with the authority of Patterson or Drake when he collided with the plaintiffs.
The defendant interposed four special defenses to the plaintiffs' application in which it alleged that the plaintiffs had not demonstrated that Kimbrough was operating an uninsured automobile as defined in the endorsement, that the plaintiffs pursued actions against Drake and Patterson to judgment without the written consent of the company as required under the endorsement provision, that a copy of the summons and complaint or other process served by the plaintiffs in connection with their legal action in Ohio was not forwarded immediately to the company in accordance with the endorsement provisions, and that the right of action set forth in the application did not accrue within six years nearest before the commencement of the present action. The defendant also alleged that the issues raised by these defenses are not subject to arbitration.
After a hearing, the court decided that the issues propounded by the special defenses were not arbitrable under the provisions of the insurance policy and that the plaintiffs, to obtain an order to compel arbitration, must first establish policy coverage in an independent lawsuit.
The obligations and rights of the parties are described and limited by their written agreement. The answer to the question whether or not the court shall direct a party to proceed with arbitration is embodied in the insurance contract. The parties cannot be compelled to arbitrate matters other than those which they have agreed to arbitrate under the provisions of their insurance policy. The arbitration agreement in the present case is contained in paragraph 6 of the endorsement, which provides as follows: "Arbitration: If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this endorsement, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement." The interpretation of the contract before us requires a determination of the meaning attached to the words "matter or matters upon which such person and the company do not agree." These words in the arbitration clause clearly refer to two issues, namely, (1) the liability of the owner or operator of an uninsured automobile to the claimant and (2) the amount of damages flowing from that liability. Frager v. Pennsylvania General Ins. Co., 155 Conn. 270, 277, 231 A.2d 531; Hartford Accident Indemnity Co. v. Travelers Ins. Co., 25 Conn. Sup. 414, 417, 206 A.2d 847; see 7 Am.Jur.2d 465, Automobile Insurance, 138. The unresolved issues raised by the allegations of the pleadings pertain to coverage under the insurance policy. They are matters which must be determined as conditions precedent to the applicability of the part of the policy which provides for the settlement by arbitration of differences between the parties on written demand of either. The trial court was correct in concluding that those issues were not matters to be determined by arbitration.
The plaintiffs in bringing this application carefully alleged at length the various facts and elements of the case upon which they relied. The defendant thereafter filed an answer to the complaint, together with the special defenses as previously listed, to which the plaintiffs filed a reply. General Statutes 52-410 provides in part as follows: "A party to a written agreement for arbitration claiming the neglect or refusal of another to proceed with an arbitration thereunder may make application to the superior court . . . for an order directing the parties to proceed with the arbitration in compliance with their agreement. Such application shall be by writ of summons and complaint, served in the manner provided by law. . . . The parties shall be considered as at issue on the allegations of the complaint unless the defendant files answer thereto within five days from the return day, and the court or judge shall hear the matter either at a short calendar session, or as a privileged case, or otherwise, in order to dispose of the case with the least possible delay, and shall either grant the order or deny the same, according to the rights of the parties." We indicated in the Frager case that the court can adjudicate questions relating to coverage at the same time that it is called upon to decide the question of arbitrability. This procedure was in accordance with our discussion of the procedure which may be followed under a "properly drawn application to compel arbitration, "and in such a proceeding, "our rule as to pleading in ordinary actions seeking recovery under an insurance policy would apply." Frager v. Pennsylvania General Ins. Co., 155 Conn. 270, 278, 231 A.2d 531; Rochon v. Preferred Accident Ins. Co., 118 Conn. 190, 195, 171 A. 429. The last sentence of the portion of the statute in question delineates the procedure to be followed in a determination of the issues in the present case. The questions relating to coverage should be adjudicated with the least possible delay, and it is then incumbent upon the court or judge, as the case may be, to either order arbitration or deny it, according to the rights of the parties.